Exam 3: Interdependence and the Gains From Trade

Figure 3-6 These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. -Refer to Figure 3-6.If Barney and Betty both specialize in the good in which they have a comparative advantage,what would the total production be?

Suppose labour in Mexico is less productive than labour in Canada.What can we conclude from this information?

Table 3-1 -Refer to Table 3-1.What does each producer have an absolute or comparative advantage in?

Table 3-3 ​ -Refer to Table 3-3.What is the opportunity cost of one sweater for Amy?

Which of the following is NOT an implication of our model of trade?

Figure 3-2 -Refer to Figure 3-2.If Paul divides his time equally between corn and wheat,what will he be able to produce?

Table 3-5 ​ -Refer to Table 3-5.Which country has an absolute or comparative advantage in each product?

Table 3-6 ​ -Refer to Table 3-5.What is the opportunity cost of one unit of bread in Italy?

When each person specializes in producing the good for which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Figure 3-4 -Refer to Figure 3-4.For Ben,what is the opportunity cost of one bottle of beer?

When will a production possibilities frontier be linear and not bowed out?

What is the term that means whatever must be given up to obtain an item?

Figure 3-2 -Refer to Figure 3-2.What do the two producers have an absolute advantage in?

Both Canada and the U.S.can produce equally tasty maple syrup.What determines which country will export maple syrup?

What is the best reason for people to provide you with goods and services?

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.What is the opportunity cost of 1 bushel of oats in Cornland?

Suppose a gardener produces both green beans and corn in her garden.If the opportunity cost of one bushel of corn is 2 / 3 bushel of green beans,what is the opportunity cost of 1 bushel of green beans?

Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5.If Fred and Ginger devote half of their time (20 hours)to the production of each good,what would the total production be?

Who developed the principle of comparative advantage?

Table 3-6 ​ -Refer to Table 3-5.What is the opportunity cost of one unit of cheese in Italy?